Seasonal pressures - Risk of excessive borrowing

WITH only 12 days to Christmas, beleaguered families are now coming under intense pressure to spend money they haven’t got.

Inevitably, according to the Irish League of Credit Unions (ILCU), that relentless pressure will increase the temptation on many to borrow beyond their means and heighten the risk of falling into the clutches of ruthless moneylenders.

The cost of Christmas will leave half of us in debt. But for tens of thousands of people who face swingeing social welfare cuts after the harshest budget since the foundation of the state, it promises to be an extremely bleak time.

Despite the rearguard efforts of Minister of State Barry Andrews to defend the indefensible, more than 100,000 Irish children will end up living in poverty according to Barnardos and the St Vincent de Paul society.

In contrast with the bankers pocketing bonuses worth €40 million despite bringing the economy to its knees, many people are staring at the distinct possibility of being saddled by debt. According to the findings of a market research survey commissioned by ILCU, one in three people will resort to credit cards and it will take six months at least for one in four borrowers to recover financially following the Christmas spree.

However, a welcome glimpse of light has emerged with news of 300 jobs for Cork and Galway in the coming months. While this must be seen as a positive development against a backdrop of doom and gloom, we need to generate more indigenous jobs rather than becoming over-reliant on international firms attracted by the carrot of Ireland’s 12.5% corporation tax rate.

Meanwhile, the doors of 500 credit unions up and down the country will be open to those struggling to make ends meet. It makes a lot of sense to avail of this offer of financial advice from an organisation deeply rooted in the community.

It will also pay to study the helpful ILCU list of tips aimed at aiding families to get through Christmas. It boils down to planning how much you can afford to spend and sticking to it; paying with cash and avoiding costly credit cards and moneylenders; shopping around for the best deal, including pre-Christmas sales; looking for interest-free deals when buying furniture or electrical goods — and by reading the small print.

Such advice may sound somewhat banal and perhaps even boring but it could mean the difference between having a reasonably happy Christmas and enjoying the New Year festivities with an easy mind as opposed to facing into a prolonged period of utter financial misery.